Shanghai Maling’s application to purchase a 50 per cent interest in Silver Fern Farms has been approved.
Minister for Land Information Louise Upston, and Associate Minister for Finance Paula Bennett, the decision-making Ministers, are satisfied that the purchase would create substantial and identifiable benefit for New Zealand.
“The Overseas Investment Office recommended that we approve Shanghai Maling’s application because it meets the criteria set down in the Overseas Investment Act 2005,” Ms Upston says.
“We are satisfied that the investment will be of substantial and identifiable benefit to New Zealand, which is the test set out in the Act. The investment will put the company in a better financial position and allow it to increase its exports.
“New Zealand shareholders will continue to have 50 per cent ownership of Silver Fern Farms, while benefiting from the injection of funds from the new investor.”
Not surprisingly SFF has welcomed the decision:
The proposed investment is now unconditional and is set to complete on 4 January 2017, the first business day of the new financial year for the partnership.
Silver Fern Farms Chairman, Rob Hewett said the new partnership with Shanghai Maling creates a unique opportunity for Silver Fern Farms.
“Shanghai Maling’s financial investment will make Silver Fern Farms the financially strongest company in the New Zealand meat industry with the ability to confidently invest in our business.
“The partnership will help us accelerate our consumer focused plate to pasture strategy globally, and to grow sustainable value for our shareholders and farmer suppliers over time.
“It is very pleasing to now be at this point after nearly 12 months, and we look forward to the partnership getting underway in the new year.”
Shanghai Maling President Wei Ping Shen was pleased the partnership could now be completed. “We are very pleased with the regulatory approval for this partnership. It clears the way for us to move ahead with the partnership. New Zealand grass fed red meat is the best in the world and the Silver Fern Farms’ brand has the potential to become a leading red meat brand globally.”
Mr Hewett stated that after the investment completes the Co-operative will, as previously advised, pay a special dividend of 30c per share to all ordinary and rebate shares expected to be paid prior to 31 March 2017) and will commence the redemption of the remaining approximately $5m of Supplier Investment Shares outstanding.
Federated Farmers says it’s a sensible decision for New Zealand:
New Zealand will enjoy benefits from the approval for Shanghai Maling Aquarius to acquire a 50 percent ownership stake in Silver Fern Farms.
Federated Farmers Meat & Fibre Chair Rick Powdrell says it’s a sensible decision for the country and aligns the company better to service the needs of global markets in a modern world.
“New Zealand farmer-shareholders will continue to own 50 percent of the co-operative and will enjoy the benefits of access to the growing Chinese market.
“This is exactly what the farmer-shareholders wanted, with a majority voting last month for the deal to be approved,” says Rick.
The decision has been met with the inevitable concerns over foreign ownership.
One of those was Winston Peters and Act leader David Seymour says the NZ First leader’s paranoia should be ignored:
Winston Peters’ call for intervention over the partial sale of a private company proves he is unfit to be in Government, says ACT Leader David Seymour.
“It’s disturbing that Winston Peters, who could potentially hold the balance of power after the election, would override the recommendation of the Overseas Investment Office and block the partial sale of a private company,” says Mr Seymour.
“Why does Winston think he knows better than the thousands of Kiwi shareholders who voted for this sale?
Seymour is right – this is a decision for the shareholders, not politicians nor anyone else who has no money at stake.
However, he is a wee bit confused about what’s been sold:
“What’s Winston so afraid of? Does he think the cows will literally get shipped off to China? That the land itself will disappear? He’s just stirring up more anti-Chinese sentiment for cheap political gain.
SFF is a meat processing company which owns processing plants and the land they sit on but it’s not a farm.
“Blocking this sale would have prevented an injection of cash into the New Zealand economy, and would send a message to businesses that private property rights are not respected in this country.”
The critics fail to see that the decision brings money into New Zealand and, as Powdrell and Seymour say, it is what shareholders voted for.
They either didn’t have the money, or didn’t want to invest it in the company which would be in dire straits without it.
Shanghai Maling is going where shareholders couldn’t or wouldn’t.
This leaves just Alliance Group as the only co-operative in the meat industry and those farmers who aren’t happy about the SFF-Shanghai Maling deal have the option of supplying the co-operative or any of the other companies, New Zealand-owned or not.
Details of the decision are at Land Information NZ